Nestle takes on Alzheimer's

Nestle SA has bought a stake in Axona, a food powder, whch is made into a milkshake, consisting of a compound derived from coconut oil and marketed to aid Alzheimer's patients, in a deal that marks the Swiss food giant's first foray into products that promote brain health, reports Dow Jones Newswire. Nestle aims to capture a bigger slice of a market that is expected to grow to $691 billion a year by 2015 from $600 billion in 2010, according to research by Euromonitor International.

Nestle didn't disclose how much it invested in privately held Accera, and declined to say how much of the Broomfield, Col.-based company it would own, but will take a seat on its board. The investment marks the first important move into "brain health products" by Nestle Health Science (NHS), a wholly owned subsidiary set up by the Vevey, Switzerland-based company last year.

"The significance of this is not the size of the investment, but the fact that it is our first step in developing our brain health portfolio," said Luis Cantarell, president and chief executive of NHS.

In 2006, Nestle invested 25 million Swiss francs in collaboration with ETH Lausanne, a leading Swiss technical university, to develop food products that protect the brain against such diseases as Alzheimer's. The company's interest in the field intensified last year with the launch of Nestle Health Science. The company plans to invest around $500 million over the next 10 years to produce more food and beverage products with health benefits. The subsidiary is focused on gastrointestinal, metabolic and brain health. Alzheimer's, which affects memory and cognitive function, is the most common adult form of dementia and affects 5 million in the U.S. alone, Nestle said.

Because it is sold as a medical food, the Axona milkshake must meet truth-in-labeling requirements, but it doesn't require approval from the FDA.

"We are not saying it is a cure for Alzheimer's. It has demonstrated in certain patient groups that it can be a source of energy for the brain and slow down cognitive decline," said Cantarell, adding the science merited further investment and clinical tests.